Covid-19 update 15 Jan 21

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The Cut Tourism VAT campaign have issued a report on its VAT survey conducted in December 20 and early January 21.  The findings strongly support the case for the retention of the reduced 5% VAT level for the tourism industry beyond the end of March 21, whilst clearly illustrating how the reduction, whether retained or passed on in full or in part to the consumer, has been instrumental in retaining employment and/or sustain businesses and/or their supply chains. It also suggests that if retained on a permanent basis it would encourage more small businesses to trade above the VAT threshold and bring a range of other mutual benefits to tourism, to business and to HMRC.

The campaign has comprehensive support and many politicians, industry representative and a broad church of other interests are lobbying the Chancellor to extend the reduction within his forthcoming Budget (3 Mar 21).  You may wish to circulate the report to help add more weight and voice to the campaign. Similarly, a broad group of industry representatives and politicians are also campaigning for a second year Business Rates holiday for retail, hospitality and leisure sectors. Often both are being presented as part of the same package of support measures required. 

Whether high level hints that a second round of “Eat out to help out” might be on the cards for “Spring” (March, April and May?), made in early December, pre second National lockdown, will be pursued by Government under current circumstances is slightly more questionable, or at least the suggested time frame might be? It certainly shouldn’t be ruled out as a stimulus measure to be put in place within the Budget to be deployed on a given future date or at date to be confirmed, whenever it is then deemed safe to relax certain restrictions and actively encourage attendance at hospitality venues.

The Cut Tourism VAT report, together with a number of recent covid-19 recovery and business and BREXIT reports, have been added to the C-19 reports page on Britishdestinations.net. The BVA BDRC ClearSight on recovery January 21 report’s comments on the rapid reversal of consumer confidence as a result of events in late December are particularly telling, as is a quick thumbnail comparison of the headline summaries of the ClearSights late December and early January reports. Go direct to the page at: https://britishdestinations.net/c19-research/

Over the last month there have been various developments relating to the sharing accommodation sector, including the public offering of Airbnb and it meteoric and, some would argue, hard to sustain, rising share price and the introduction of a new duty on online retail sales platforms to account for UK VAT on third party seller’s sales. The latter, although not directly tourism related, is potentially a further indicator of a growing willingness of UK authorities to consider regulating the Gig and the sharing economy and other online disruptors.  I appreciate that none of this will not be foremost in your minds right now but ultimately levelling the playing field between the increasingly hard pressed, establish and regulated provision and the newer, largely unregulated players will be significantly more important during the post covid-19 recovery than it ever was before the covid-19 crisis.  Things are going to be hard enough for established hotels, guest house, B&Bs self-catering etc. now and during recovery, without them then finding themselves being undercut in a challenging market by those not being held to account on necessary regulation, taxation, rates etc.  A selection of typical articles seen over the last month have been added to Our Sharing Economy and OTAs pages. Access them directly at: https://britishdestinations.net/tourism-the-sharing-economy-and-its-wider-implications/

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